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12 - ONCOR FRANCHISE AGREEMENT EXTENSIONItem No. 12 memorandum TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: ONCOR FRANCHISE AGREEMENT EXTENSION DATE: September 9, 2016 BACKGROUND: The City of Paris has historically granted Oncor Electric Delivery Company, LLC or its predecessors a franchise to provide the delivery of electricity to residents and businesses located within the City by operating in City rights -of -way. STATUS OF ISSUE: The most recent franchise agreement with Oncor Electric Delivery Company expired June 30, 2016 and an extension was approved by the City Council through September 30, 2016. The staff has been in negotiations with Oncor for a new franchise agreement, but the agreement will not be ready by the end of September plus the new franchise ordinance will require three public readings. The new extension agreement being presented for approval allows Oncor and the City to continue to follow the terms of the last franchise agreement until a new franchise agreement is approved by the City Council and Oncor or April 1, 2017 whichever comes first. BUDGET: This franchise produces approximately $1,350,000 in revenue annually. RECOMMENDATION: Motion to approve a letter of understanding between Oncor and the City of Paris. ONCRm Ritchie Sturgeon Counsel September 12, 2016 Attorney Stephanie H. Harris City Attorney City of Paris, Texas P.O. Box 9073 Paris, Texas 75460 Dear Attorney Harris, As the parties have discussed, the existing Franchise between the City of Paris (the "City ") and TXU Electric Delivery Company (now Oncor Electric Delivery Company LLC [ "Oncor"]) adopted by Ordinance No. 2006 -021 will expire on October 1, 2016 in accordance with our letter agreement dated June 27, 2016. This letter confirms that the City and Oncor will continue to operate under the terms of the current Franchise between the parties adopted in Ordinance No. 2006 -021 until April 1, 2017 or until the parties enter into a new franchise agreement (i.e., adopted by City Council and accepted by Oncor), whichever comes first. This letter agreement between the City and Oncor reflects the parties' mutual agreement to continue to be governed by and adhere to the terms of the existing Franchise as noted in this paragraph. Furthermore, the City and Oncor agree that original signature(s) or, alternatively, facsimile or e-mail copies of signature(s) are valid for purposes of evidencing this letter agreement, which may be executed in multiple counterparts. Accepted: Oncor Electric Delivery Company LLC By- e n /P`P� Ron McCune, Franchise Manager — Regulatory Affairs Sincerely, Q '-.e Ritchie Sturgeo Counsel for Oncor Accepted: City of Paris, Texas L0 A.J. Hashmi, Mayor Oncor 1616 Woodall Rodgers Freeway Dallas, Texas 75202 Tel: 214.486.6345 ritchie.sturgeon@oncor.com